Court filing shows GAB’s Kennedy asking Lois Lerner if IRS ‘would be interested’

M.D. Kittle
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Posted: Nov 19, 2015 5:49 PM
Court filing shows GAB’s Kennedy asking Lois Lerner if IRS ‘would be interested’
Part 288 of 286 in the series Wisconsin's Secret War

MADISON, Wis. – Staff at Wisconsin’s nearly extinct speech regulator misled their board about the agency’s deep involvement in a politically driven John Doe investigation months before the board authorized the probe, according to a new filing by plaintiffs in a lawsuit against the Government Accountability Board.

More so, the latest court documents show GAB director and general counsel Kevin Kennedy approaching Lois Lerner, the former Internal Revenue Service agent also accused of targeting conservative groups.

Kennedy asked Lerner, then-director of the IRS Exempt Organizations division about the initial findings of the a secret investigation into 29 conservative groups and the campaign of Gov. Scott Walker. Kennedy, who has refused to tell the Legislature about his communications with the IRS, asked his close professional friend Lerner whether the information would be “something the IRS would be interested in looking at.”

KENNEDY AND LERNER: A new court filing shows Government Accountability Board Director Kevin Kennedy reaching out to former IRS administrator Lois Lerner to see if the IRS ‘would be interested’ in going after targets of the GAB’s political investigation.

RELATED: Lawmakers want answers on GAB director Kevin Kennedy’s IRS conversations

Thursday’s brief in opposition of the GAB’s motion for summary judgment in the 1 ½-year-old lawsuit asserts the accountability board has woven “misleading and incomplete factual narrative into an unsupported interpretation of its Enabling Statute.”

It is that statute that the GAB has tried to hold up in defending its conduct in an unconstitutional investigation, asserting that the law gives it the authority to do what it did. It does not, charge the plaintiffs in the case, long-time conservative activist Eric O’Keefe and his Wisconsin Club for Growth, among scores of conservatives targeted in the dragnet.

The lawsuit alleges the GAB exceeded its authority, helping to lead a secret investigation alongside its abusive partners, the Democrat-led Milwaukee County District Attorney’s office.

All along, the accountability board has asserted it ran a “parallel” investigation with the Milwaukee County DA and four other district attorneys who signed off on the five-county probe. It is the “fiction” of “assistance,” that the plaintiffs take devastating aim at.

The GAB’s defense unravels when considering the agency brought in and paid for the special prosecutor, former federal prosecutor Francis Schmitz, who at the time was a GAB-contracted special investigator on the probe.

“Recruited, hired, and paid by the GAB, he was given sole power to end the Doe and bring charges,” the brief states. “…John Doe II was in every sense a GAB-funded and staffed effort.”

In doing so, the GAB lost some power it did not care to give up, the brief asserts.

“The GAB could thereafter control John Doe II only by cajoling, embedding GAB staff, and controlling the purse,” states the filing. Emails made public seem to support such assertions.

For nearly a year, the GAB paid Schmitz for purely prosecutorial activities, “using its purse strings to exercise control over the ongoing criminal proceeding,” the brief asserts.

After the filing of the lawsuit, Schmitz “altered his time entries at the request of GAB staff to make his activities seem more commensurate with the role of GAB Special Investigator rather than criminal prosecutor. The inherent conflict in the dual role engagement and the impropriety of the GAB’s payments to the Special Prosecutor, once discovered, caused dissension within the Board,” with some judges raising questions about the payment process, according to the court filing.

But before the full board of retired judges voted to “begin” the GAB investigation, GAB staff members, people exposed to have very political motives, spent 10 months very much involved in the probe.

Between August 2012, when Milwaukee County DA John Chisholm launched what became known as “John Doe II” and June 2013, when the GAB approved the probe, staff members were busy “analyzing a large body of materials from John Doe I, coordinating John Doe meetings, preparing detailed agendas for those meetings, drafting legal memoranda, providing prosecutors with information on stayed complaints related to those under investigation, and helping determine what additional telephone records, bank records, and e-mail accounts should be seized.”

John Doe I refers to the probe Chisholm and his assistants worked for nearly three years, investigating Walker when Walker was Milwaukee County executive, as well as his former aides and associates. The investigation ended with six convictions, but only two had anything to do with the original scope of the John Doe.

What that investigation did do is arm prosecutors with the ability to operate an ongoing spy campaign against conservatives, enemies of the left.

“The GAB has previously conceded that its August 2012 admittance to John Doe II was ‘a necessary predicate so defendant Kennedy could inform Board members of the facts forming the basis for John Doe II,’” the brief states. “But it remains unexplained why the GAB staff conducted activities for more than four months without even informing the Board, let alone obtaining the required resolution.”

GAB Chairman Gerald Nichol earlier this year told Assembly Speaker Robin Vos, R-Rochester, that the board members were “closely involved in overseeing all of the staff’s investigative activities.”

“I can assure you that the staff has taken no action in theses matters without the Board’s full knowledge and prior approval,” Nichol claimed.

The GAB quickly committed $1 million of taxpayer money to cover the costs of the investigation. It did not just pay Schmitz and a document storage vendor, however; the GAB also staffed the prosecutors’ investigation, the brief asserts. Doing so accomplished two purposes, the plaintiffs say.

“First, it provided limitless taxpayer resources to build the prosecution’s foundation. Second, it freed the GAB of the ‘notice requirements it would have faced had it come clean and directly requested the documents from a court of law, instead of using Schmitz as Special Prosecutor. So GAB staffers simply worked as line prosecutors in the Doe,” the brief claims.

GAB staffers prepared and drafted warrants and subpoenas that were executed and served, including in predawn, paramilitary-style raids on the homes of conservative targets.

“The GAB even authorized its own special investigator, Dean Nickel, to swear out the request for the search warrants,” the filing states. “Although the GAB prepared and issued the subpoenas, it used a Milwaukee investigator, Robert Stelter, to sign the requests for subpoenas. This served the specific purpose of trying to avoid the notice requirements under the Enabling Statute.”

Citing an exhibit in the lawsuit, the plaintiffs’ attorneys note a communication between the GAB and prosecutors that states, “GAB to research tax records issue. Then determine whose records we would like to obtain if possible –without giving notice to the parties involved.”

Defying its “assistance” role, the GAB hired numerous special investigators without an approval vote from the board, the brief claims.

These investigators, along with GAB lead staff members Shane Falk, Jonathan Becker, Kennedy, Nathan Judnic, and Molly Nagappala, “poured thousands of hours into reviewing materials obtained from John Doe I and John Doe II…”

And the GAB also retained the forensic IT company used to categorize and hold the millions of documents illegally seized. The vendor was paid from the GAB’s unlimited sum sufficient budget. That same budget, which recently passed legislation does away with along with the accountability board, would serve as a “blank check” for staff, the brief states.

“These actions far exceed the ‘limited assistance with the Doe’ the GAB now seeks to portray,” the filing asserts.